Interest Rate Reduction Refinance Loan (IRRRL)

Lower your interest rate and save money by refinancing your current VA home loan with a VA Interest Rate Reduction Refinance Loan (IRRRL). Another refinancing option is getting into a fixed rate mortgage with an adjustable rate mortgage (ARM), allowing you to manage your finances with a steady rate and payment plan.
Understanding IRRRL

  • Apply for an IRRRL without an appraisal. No appraisal or credit package is required when applying for an IRRRL.
  • No cost out of pocket! An IRRRL can include all costs or be done with a high enough rate for the lender to pay the costs
  • Refinancing from a VA ARM to a fixed rate loan, interest rates may go up
    Any VA Lender may process your application for an IRRRL though no lender is required to give you an IRRRL
  • Loan terms may vary so those eligible for a VA loan are encouraged to contact several lenders
  • Cash may NOT be received from loan proceeds


If you’ve already used your VA eligibility to secure a loan, you may be eligible for an IRRRL. Refinancing with an IRRRL will reuse the entitlement you used for your original loan and must be a VA to VA refinancing.

No Certificate of Eligibility (COE) is required. Bring your COE to the lender to prove prior use of your entitlement
Only the existing VA loan can be paid from the proceeds of an IRRRL. If you have a second mortgage, the holder must agree to subordinate that lien so that your new VA loan will be a first mortgage
You may have used your entitlement by obtaining a VA loan when you bought your house, or by substituting your eligibility for that of the seller, if you assumed the loan.
Occupancy requirements differ from other VA loans. To qualify for an IRRRL, you need only certify that you previously occupied the home.

How to Apply

If you have your Certificate of Eligibility (COE) showing the prior use of your entitlement, you may use that or email confirmation from your lender that the certificate was used. A new COE is not required to apply.
Loan Limits

A loan limit is amount of money a qualified Veteran with full entitlement is able to borrow without offering a down payment. There are no limits put in place by the VA on how much money you may borrow to finance your home. There are, however, limits on the liability VA will assume which does affect the amount an institution will agree to lend. Loan limits vary by county and state based on the value of homes in the area.

Each eligible Veteran has $36,000 available in the basic entitlement. Usually, institutions will loan up to four times the available entitlement without a down payment if the Veteran is income and credit qualified and if the property is appraised at the asking price. For information about loan options and limits in your county, please visit our Loan Limits page.
VA Funding Fee

Because a VA loan can be given without a down payment or monthly mortgage insurance, Veterans using the VA Home Loan Guaranty benefit are usually required to pay a funding fee in order to reduce the cost to taxpayers. This fee represents a percentage of the loan amount which will vary based on a number of factors including the amount of the loan, military category, if your are a first-time buyer and whether a down payment is provided. The funding fee can be financed or paid in cash, but must be paid at closing.

Second time users who do not wish to make a down payment and National Guard and Reserve Veterans will face higher funding fees. Some lenders off IRRRLs as an opportunity to reduce the term of a loan from 30 to 15 years, while this can save money in interest over the life of a loan, the monthly payment can increase dramatically if the reduction in the interest rate is not at lease one percent (two percent is better). Do your homework as the increase in monthly payment could end up being more than you can afford.

Click here for more information on Loan Fees and visit for complete VA benefits information.

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